Establishing secure connection…Loading editor…Preparing document…

Construction Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

CONSTRUCTION AGREEMENT

PARTIES AND PROPERTY

Owner Name:

Contractor Name:

SCOPE OF WORK

Contractor shall perform the work described in this Agreement and in any attached exhibits or plans. The scope of work shall include all labor, materials, equipment, supervision and services necessary to complete the construction in a good and workmanlike manner, in compliance with applicable laws, codes and regulations, and in accordance with the plans and specifications agreed by the parties.

CONTRACT PRICE & PAYMENT

Contract Price (Total):

Initial Deposit: Retainage Percentage:

Payments due within days of invoice. Late payment interest at .

TIME OF PERFORMANCE

Commencement of Work: . Substantial Completion by: . Final Completion by: .

Time is of the essence. Contractor shall commence and prosecute the Work diligently. Extensions of time shall be documented in writing and signed by both parties and shall be allowed only for causes beyond Contractor's control.

PERMITS, REGULATIONS & SITE CONDITIONS

Contractor shall obtain and pay for all permits, inspections and approvals required for the performance of the Work unless otherwise stated in writing. Contractor represents it is familiar with existing site conditions. Owner shall disclose latent conditions known to Owner.

INSURANCE, BONDS & INDEMNITY

Contractor shall maintain commercial general liability insurance, automobile liability, and workers' compensation as required by law, with limits not less than those stated below. Contractor shall name Owner as an additional insured on the commercial general liability policy for liabilities arising from the Work.

CHANGES & CHANGE ORDERS

Any change to the Scope of Work, Contract Price or Time of Completion shall be made only by a written Change Order signed by Owner and Contractor. Change Orders shall state the adjustment to price and time and shall be incorporated into this Agreement.

WARRANTY

Contractor warrants that materials and workmanship furnished under this Agreement will be free from defective workmanship and materials for a period of months from the date of Final Completion, unless otherwise stated in writing.

DISPOSALS, HAZARDS & DISCLOSURES

Owner represents known conditions at the property as of the Effective Date. Contractor shall promptly notify Owner in writing if hazardous materials or conditions are discovered. The parties acknowledge the following disclosures:

Lead-based paint present? Yes No

Known mold or moisture damage? Yes No

Prior structural damage or repairs? Yes No

DEFAULT, REMEDIES & LIENS

If either party materially breaches this Agreement, the non-breaching party may pursue all remedies available at law or in equity, including specific performance, damages, and recovery of costs and attorney's fees as permitted by law. Contractor shall pay subcontractors and suppliers and shall not permit mechanics' or materialmen's liens to attach to the Property; Contractor shall, upon request, furnish lien waivers and releases.

TERMINATION

Owner may terminate this Agreement for cause if Contractor fails to correct substantial defaults after written notice and a reasonable opportunity to cure. Contractor may stop work or terminate if Owner fails to make payments when due, following written notice and an opportunity to cure. Upon termination, parties will account for work performed and payments due; Owner may complete the Work and charge Contractor for additional costs where Contractor is in default.

GOVERNING LAW, SEVERABILITY & ENTIRE AGREEMENT

This Agreement shall be governed by and construed in accordance with the laws of the state of . If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force. This Agreement, including any exhibits and Change Orders, constitutes the entire agreement between the parties and supersedes prior agreements and understandings.

NOTICES

All notices must be in writing and delivered to the addresses set forth above or to such other address as either party designates in writing. Notice is effective upon delivery by hand, certified mail, or other verifiable method.

MISCELLANEOUS PROVISIONS

Subcontracting: Contractor may engage subcontractors but remains responsible for their performance. Independent Contractor: Contractor is an independent contractor and not an agent or employee of Owner. Assignment: Neither party may assign this Agreement without the other's prior written consent, except that Contractor may assign to a successor in interest of substantially all its assets.

ACKNOWLEDGMENT

Each party acknowledges that it has read and understands this Agreement, that it has had the opportunity to seek independent legal advice, and that the person signing below is authorized to bind the party.

Owner Name:

By:

Date:

Contractor Name:

By:

Date:

Enter text✕
Prepare your document for signing right on this page
  • 01 Edit the text and complete the fields
  • 02 Click Sign Now and on the next screen add recipients and signature fields in SignNow
  • 03 Start your free trial to sign and send your doc
Sign Now

What a Construction Agreement Covers

A Construction Agreement is a legally binding contract that sets the rights, duties, scope, schedule, payment terms, and risk allocation between an owner and a contractor (or between contractor and subcontractor) for a construction project. It typically defines the work description, contract sum, allowances, change order process, completion criteria, insurance and indemnity obligations, dispute resolution method, and termination rights. Properly drafted Construction Agreements reduce ambiguity on-site, support lien and payment claims, and form the primary record relied upon in permitting, inspections, and contract enforcement.

Why a Clear Construction Agreement Matters

A precise Construction Agreement allocates risk, clarifies payment and schedule expectations, and creates an enforceable record for claims, liens, and dispute resolution under applicable law such as ESIGN and state contract statutes.

Why a Clear Construction Agreement Matters

Who Typically Prepares or Signs This Agreement

Identifying the correct signatories, payment contacts, and authorized representatives up front helps avoid disputes and payment delays.

  • Owners and developers who define project scope, budgets, financing milestones, and acceptance criteria.
  • General contractors who commit to perform work, hire subcontractors, and manage on-site safety and scheduling.
  • Subcontractors and suppliers who rely on payment terms, lien waiver language, and scope exhibits to protect their rights.

Primary Signers and Their Roles

Owner / Developer

The individual or corporate entity that retains the contractor and controls funding and project approvals. The owner typically specifies performance standards, approves change orders, and certifies progress payments.

Contractor / Prime

The licensed contractor responsible for delivering the work per contract documents, supervising subcontractors, carrying required insurance, and obtaining required permits and inspections.

Essential Sections to Include in a Construction Agreement

A professional Construction Agreement organizes terms so parties can operationalize work, manage risk, and document changes without ambiguity.

Scope of Work

Precise description of tasks, deliverables, plans, and specifications; attach drawings and a work schedule as exhibits to avoid scope disputes.

Payment Terms

Contract sum, progress payment schedule, retainage percentage, required invoicing procedures, conditional lien waiver timing, and remedies for nonpayment.

Change Orders

Process for submitting, approving, and pricing changes; include time extensions, markup caps, and required written approvals before extra work.

Schedule and Milestones

Project start and completion dates, critical path milestones, liquidated damages or incentives, and excusable delay definitions (force majeure, permitting).

Insurance and Indemnity

Required insurance types and limits (general liability, workers' comp, builder's risk), additional insured language, and indemnification scope.

Dispute Resolution

Choice of governing law, forum selection, and mechanisms (mediation, arbitration, litigation) with procedures for interim relief and bond claims.

Step-by-Step: Completing a Construction Agreement

Follow these steps to assemble, review, and execute a Construction Agreement with minimal rework and clear acceptance criteria.

  • 01
    Assemble Documents: Gather plans, specifications, permit numbers, and insurance certificates.
  • 02
    Define Scope: Insert detailed scope language and attach exhibits for clarity.
  • 03
    Set Payment Terms: Agree and enter contract sum, retainage, and milestone schedule.
  • 04
    Execute and Exchange: Obtain authorized signatures, notarization if required, and distribute executed copies to stakeholders.

Configuring an Online Signing Workflow

Set up fields, signer order, and authentication so the executed agreement meets legal and project requirements.

Field Configuration
Signer Order Sequential or parallel signing depending on approval flow
Authentication Email link, SMS code, or KBA for higher assurance
Required Fields Signature, printed name, title, date, and initials where needed
Audit Options Enable timestamp, IP capture, and certificate of completion

Digital Signing and Technical Requirements

Ensure the platform complies with ESIGN/UETA and supports optional notarization workflows and retention export for audits.

  • File Formats: PDF or DOCX
  • Integrations: Procore, Salesforce, NetSuite, Google Workspace
  • Security: TLS in transit, AES-256 at rest

Where to Send or File the Executed Agreement

After execution, route the agreement to project stakeholders and retain copies in your document control system to support payments and inspections.

  • Owner: Primary file for contract administration and payment approvals
  • Contractor: Operational copy for site supervision and subcontractor management
  • Lender / Finance: If financing, provide an executed copy to lenders for draw approvals
  • Permitting Authority: Submit where required to support building permits or inspections

Key Dates and Deadlines to Track

Track execution, performance milestones, and statutory deadlines to avoid penalties and preserve rights.

Contract Effective Date:

Date work and warranty periods commence

Substantial Completion:

Milestone for payment reductions and punch-list start

Final Completion:

Trigger for final payment and release of retainage

Notice of Claim Deadlines:

State-specific deadlines for liens and bond claims

Warranty Period:

Contract-specified duration for defect claims

Project Milestones and Contract Stages

Sequence these core stages to align contract payments, inspections, and deliverables for efficient project control.

01

Pre-Construction

Finalize scope, permits, bonds, and insurance before mobilization.

02

Mobilization

Site setup, initial submittals, and schedule confirmation.

03

Construction

Perform work per schedule; manage changes and inspections.

04

Closeout

Complete punch list, obtain certificates, and process final payment.

Required Information and Essential Contract Data

Parties: Full legal names
Scope: Detailed work description
Price: Contract sum and allowances
Schedule: Start and completion dates
Insurance: Types and limits required
Signatures: Authorized signer, title, date

Common Mistakes to Avoid

  • Vague scope language that leaves material tasks undefined and causes change order disputes.
  • Missing authorized signature or wrong signer title, which can render the contract unenforceable.
  • Failure to attach exhibits (plans, schedules) that parties verbally agreed to, creating scope gaps.
  • Inadequate payment trigger language that delays invoicing or allows payor disputes.

Consequences of Errors or Omissions

Payment Delays: Late payments and potential interest or withholding
Lien Risk: Improper notice or filing can forfeit mechanics lien rights
Contract Claims: Increased disputes, litigation, or arbitration costs
Regulatory Penalties: Permit violations or stop-work orders
Insurance Gaps: Denied coverage if policy requirements unmet
Statute Loss: Missed filing deadlines can bar claims

eSignature Vendor Comparison for Construction Documents

A compact comparison of common vendor capabilities and pricing to consider when choosing an eSignature provider for Construction Agreements.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day trial Varies by plan Varies by plan Varies by plan Varies by plan
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Real-World Construction Agreement Examples

These concise case examples show how Construction Agreements are applied and adapted across projects.

Small Commercial Build

A developer used a fixed-price agreement with phased milestone payments for tenant fit-out

  • Included 5% retainage until final punch-list
  • The clear milestones and payment triggers reduced disputes and enabled timely lender draws.

Public Works Contract

A municipality required prevailing wage and bonding provisions for a road contract

  • Added certified payroll and audit rights
  • Including these clauses upfront ensured compliance and streamlined project closeout after inspections.

Practical Tips for Accurate and Efficient Completion

Adopt consistent formats and pre-approved clause libraries to reduce negotiation cycles and drafting errors.

Use Exhibits
Attach drawings, schedules, and specifications as labeled exhibits to prevent scope drift and conflicting interpretations.
Standardize Payment Triggers
Link payments to measurable deliverables or inspection approvals to reduce subjective disputes.
Require Insurance Certificates
Obtain current certificates and additional insured endorsements before site mobilization.
Record Changes
Document all change orders in writing with price and time adjustments before proceeding with extra work.

Construction Agreement FAQs and Common Issues

Answers to frequent questions and practical troubleshooting for preparing and executing Construction Agreements.


Need help? Contact support

be ready to get more
Join over 28 million airSlate SignNow users
Sign Now
Company
Forms
Pricing
Resources
Knowledge base
Other Products
© 2026 airSlate Inc. All rights reserved.